Shoprite vs Walmart Which Performs Better?

Shoprite and Walmart are two of the biggest retail giants in the world, constantly competing for market dominance. Investors looking to diversify their portfolio may consider investing in one or both of these stocks. Both companies have a strong presence in the retail industry, but their business models, customer demographics, and growth strategies differ. Understanding the key differences between Shoprite and Walmart stocks can help investors make informed decisions about which stock is the better investment for their financial goals.

Shoprite or Walmart?

When comparing Shoprite and Walmart, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Shoprite and Walmart.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Shoprite has a dividend yield of 1.09%, while Walmart has a dividend yield of 0.96%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Shoprite reports a 5-year dividend growth of -7.20% year and a payout ratio of 55.31%. On the other hand, Walmart reports a 5-year dividend growth of 1.85% year and a payout ratio of 41.18%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Shoprite P/E ratio at 19.96 and Walmart's P/E ratio at 43.56. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Shoprite P/B ratio is 0.35 while Walmart's P/B ratio is 8.02.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Shoprite has seen a 5-year revenue growth of 0.52%, while Walmart's is 0.34%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Shoprite's ROE at 1.79% and Walmart's ROE at 18.91%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $17.72 for Shoprite and $84.12 for Walmart. Over the past year, Shoprite's prices ranged from $11.98 to $18.18, with a yearly change of 51.75%. Walmart's prices fluctuated between $49.85 and $85.54, with a yearly change of 71.61%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.